| Mideast and African Telecom Sector Striving on Outsourcing Finance |
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| Tuesday, 15 May 2007 | |
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Telecom sectors of Middle East and African countries are increasingly opting for debt financing so as to capture the existing market and expand and acquire new markets. Budding telecom sector in Middle East and Africa (MEA) region can generate above $30bn in debt this year to finance a component of their extension and acquirement, according to the publication, Telecom Finance. Nevertheless, Shuaa Capital has articulated apprehension on height of liability that telecom operators in Middle East region are ensuing to follow their extension plan. In first quarter of current year, Telecom sector has swabbed above $14.7bn, more than that in 2006, said Telecom Finance in news published on Gulf Times . Middle-eastern sponsors and telecom operators were interested in investing further in telecom industry of other emerging markets like India and Europe. Strong economic development and increasing buying capability will offer momentum required to contribute to the sector’s expansion in target marketplace. African market persists to draw momentous attention from investors as it has enormous potential for expansion; reason is that its telecom sector is enormous and immature. Across Middle East and Africa, other companies vigorously drawn in the extension and acquisition plan are STC, Oger Telecom, and Wataniya. These engage extensive investments, money acquired by raising debt, in the shape of syndicated loans. “Year 2006 made a record in telecom industry with the debt financing over $14.07 billion, raised by local telecom operators in MEA region to expand and acquire. However 2007, is already leading the way and moving towards setting another record,” said a research analyst at RNCOS. Many African countries’ governments have comprehended growing investor desire for region and are liberating the markets to new entrants in telecom sector. The increase in level of debt financing is determined by gesture of actions by telecom companies with Nigeria’s Celtel, in February declaring award of N6.4-billion ($50-million) worth of agreement with Motorola to enlarge its GSM network inside South and South East area of Nigeria. Industry expert's expresses appreciably that telecom companies across the globe, progressively have to outsource financial support from debt capital market to finance bulk of expansions they capitalize on to enter new markets. They have to gradually look for debt-financing alternative in their pursuit to procure the market share in markets in which they are previously not present. Related Market Research Reports: |
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